Ministers have been accused of "burying" a document that makes a damning assessment of how plans to cut housing benefit will hit families.

The report, written by civil servants at the Department for Work and Pensions and published on its website last week, warns of a risk that schooling will be disrupted, homelessness will rise and more people will face overcrowding.

It says local authorities may have to build "temporary classrooms" to house children whose families have been forced to move to cheaper accommodation, and suggests overcrowding could "hamper" young people doing their homework.

The report estimates that more than 930,000 households will be hit by the measures, which include reducing the level at which housing benefit is paid, introducing a cap and cutting the amount given to people who have been out of work for more than a year. About 450,000 will be families with children.

Douglas Alexander, the shadow minister for work and pensions, said the report confirmed his worst fears. "For several weeks I have been demanding [work and pensions secretary] Iain Duncan Smith publish a full impact assessment on all these measures and now he has tried to slip out this alarming report which doesn't even examine all the changes he is rushing through," he said.

Alexander said the publication, which is an impact assessment of the measures, has been "buried" on the DWP website – a charge dismissed by officials.

The report begins by claiming the policy is necessary to bring down the overall cost of housing benefit, which has risen from £11bn in 1999-2000 to £22bn today. It says that in 80% of cases the shortfall between the new benefit level and rent will be less than £10 a week – and highlights efforts to mitigate the effects.

It then turns to "risks", including:

■ disruption to children's education and reduced attainment;

■ an increase in households with rent arrears, eviction and homelessness;

■ disturbance to support services for people with disabilities;

■ more overcrowded households;

■ a fall in private rented sector properties available to housing benefit tenants.

The civil servants warn: "Children who experience disruption to their schooling, particularly in the run-up to examinations, may do less well than pupils who are otherwise similar."

They say the removal of the "five-bedroom local housing allowance rate" will affect a small number of families but those with a "much increased risk of being in poverty". Families "could be affected by overcrowding, particularly where they downsize to find affordable accommodation. This could have an adverse affect on health and mental well-being," the report adds. It says teenage mothers may be at risk of "mental problems" if isolated in their new location.

Alexander said Duncan Smith must not be allowed to turn a "blind eye" to the findings. "He must now go back to the drawing board and rethink these ill thought through proposals."

Campaigners were also furious. David Orr, chief executive of the National Housing Federation, said: "The content of these assessments is truly damning. They demonstrate that the cuts will have a dire impact on the health and mental wellbeing of children and young mothers. It is unbelievable that in the face of this evidence, the government is carrying on with the cuts – seemingly oblivious to damage they will do the lives of the vulnerable."

Campbell Robb, chief executive of the charity Shelter, said the report painted an "extremely disturbing picture of what lies ahead for many vulnerable groups, and in particular for children, when these cuts start to bite". He called it "extremely disappointing" that the government was ignoring evidence from experts and its own department.

A DWP spokeswoman said: "It's nonsense to say that we have buried the assessment or that we ignored it. It was published in the usual fashion and its outcomes were considered as part of the process which has seen a wide-ranging consultation take place on this vital area of policy."

She added that there was an "unarguable" need for steps to manage housing benefit expenditure that has been "spiralling out of control for a decade". That would ensure the benefit did the job it was supposed to while being fair to the taxpayer as well, she added.